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Tag: Redseer Strategy Consultants

  • Study developed in partnership with Redseer Strategy Consultants

    Nykaa tables Beauty Trends Report

    Beauty retailer Nykaa tabled its ‘Nykaa Beauty Trends Report’ that spotlights nine trends that are transforming the beauty Industry. This study developed in partnership with Redseer Strategy Consultants explores the key factors driving growth, uncovers emerging trends, and provides actionable insights on how brands can successfully navigate and thrive in the dynamic beauty market.

    Said Anchit Nayar, Executive Director and CEO, of Nykaa Beauty: “As India rapidly ascends to become one of the world’s most influential beauty markets, we at Nykaa are incredibly optimistic about its future. The insights from our Beauty Trends Report clearly show a market poised for extraordinary growth, driven by premiumization, technological advancements, and a new generation of discerning consumers. Nykaa remains committed to leading this transformation by democratizing access to the world’s best beauty brands, fostering innovation, and expanding our reach across both digital and physical channels. We believe that by staying true to our core values of authenticity and customer-centricity, we will not only grow with the market but also play a pivotal role in shaping the future of beauty in India.”

    Added Anil Kumar, Founder, and CEO of Redseer Strategy Consultants: “The Indian Beauty and Personal Care market, valued at USD 21 billion, is on the brink of a transformative journey, projected to grow at a robust 10-11% CAGR over the next five years. This dynamic sector is not merely expanding; it’s rapidly evolving, with e-commerce expected to surge by 25% annually, leading the way. The democratization of beauty expertise through social media, now influencing over 500 million users, is ushering in a new era of informed and empowered consumers. Brands that embrace this evolution, leveraging omnichannel strategies and innovative offerings, will not only thrive but will shape the future of beauty in India. The coming years will be pivotal as we witness a market that doesn’t just grow—it redefines itself.”

    The Nine Major Trends Shaping the Future of Beauty Consumption in India:

    1. Aspirations galore: Rise of premium beauty consumption: The demand for premium beauty products is surging, fuelled by the rise in high-income households and increase in discretionary spending, as consumers seek superior quality, research-driven results, and exclusive brand experiences.
    2. Expanding beauty vocabulary and beauty baskets: ‘Stepification’ & Innovation in Beauty: Consumers are adopting sophisticated, multi-step beauty routines, expanding their beauty baskets with niche and innovative products.
    3. Digital natives, beauty innovators: Decoding Gen Z & Young Millennials: Constituting 28-30% of India’s population, this demographic is redefining beauty by moving forward and prioritizing self-expression, proactive skincare, and embracing bold new trends.
    4. Beauty Beyond Metros: Boom Towns, Easy Access, Growing Aspirations: Cities beyond metros are emerging as significant markets, propelled by rising incomes, growing aspirations and the physical retail presence of beauty brands.
    5. Homegrown Brands: Changing Dynamics and Path to Growth: A vast group of homegrown beauty brands have emerged across price points and categories, also fuelled by VC funding, yet only a few brands have managed to truly stand out and scale. While these successful brands are pioneering change with innovative products and formats, others are exploring partnerships and fresh investments for growth.
    6. Expanding ecosystem: Partners and Platforms: The industry is witnessing brands across the spectrum shifting their spending heavily towards influencer marketing and at the same time new platforms & channels are emerging for engaging with different audiences.
    7. Beyond the label: Demystifying ingredient-focused beauty: Ingredients are becoming pivotal in consumer decision-making, as consumers increasingly seek targeted solutions for specific issues like dry skin, rashes, and other concerns. Trends like ‘skinification’ driving innovation across beauty categories.
    8. Small shifts, seismic impact – The microtrend revolution: Rapidly shifting microtrends, often influenced by celebrities, are reshaping the beauty industry, particularly among younger consumers. Brands are now required to adopt more agile manufacturing processes to quickly produce and capitalize on these fleeting trends.
    9. AI, Personalisation & Beyond: Intersection of beauty and technology: Technology is transforming the beauty landscape through personalisation, specialised long-tail searches, seamless shopping experiences, and efficient supply chain processes, allowing brands to meet consumer needs with greater precision and speed
  • India's Digital Ad Spend to Surge to $21Bn by 2028

    Redseer Strategy Consultants Report: Digital ad spends to shoot up

    By Our Staff

     

    Redseer Strategy Consultants has tabled a report digital ad spend in India. The report estimates digital ad spend in India to become 2.5X in next 5 years to USD 21 Bn, growing at CAGR of 19-21%.

     

    Said Mukesh Kumar, Engagement manager, Redseer Strategy Consultants: “Upon mapping market sizing across media agencies, we observe a significant under-reporting of digital ad spend in India. However, Redseer projection has considered enterprise spends, SMB spends, influencer marketing, affiliate marketing and gaming.”

     

    Notedly, Growth in UGC will empower individual creators and influencers to build their digital identity, which brands can leverage for digital ads. This strong ecosystem of ~2.5 to 3 million creators is expected to drive marketing spending of $2.8Bn- $3.5Bn by 2028, the report added.

     

    Advertising’s Global Scenario

    Economies that have strong consumer spending can splurge on advertising. For instance, the US spends 1.4% of its GDP on advertisements, of which 64% goes to digital ads, and the UK spends 1.3%. Since India is a developing nation, it spends 0.5% of its GDP, of which 53% goes to digital ads. However, with India’s PCFE expected to grow ~ 6-7% over the next 5 years, the advertising expenditure is bound to rise.

     

    Looming Slowdown & its Effect

    Global slowdown due to increasing interest rates, energy crisis etc. has led to new-age companies focusing on profitability and controlling their spending on ad and hence slower growth is expected in FY23.Under the current economic headwinds, the ad market is estimated to grow by 6% -8% in FY23. One can’t ignore the fact that of $ 15 Bn spent on advertising in FY22, 53% went into digital advertisements indicating a growth nested within the overall downturn.

    We expect macroeconomic engines to pick up momentum again by FY24 since, after every economic downturn, eventually, consumer morale returns.

     

    Digital Ads – A Necessity

    With users spending ~7 hours daily on their smartphones, digital platforms have a good engagement rate. Marketers are increasingly advertising these for the precise target audiences. Some of the most popular performances driving digital advertising platforms include eCommerce, short videos, OTT, social media, long-form videos, and news outlets.

    Incumbent market players like Alphabet and Meta will maintain their market share to alternate digital content platforms like OTT Video, OTT Audio, Shortform video, and eCommerce. Moreover, content and gaming platforms are emerging as the fastest-growing digital ad platforms.

     

    SMBs Embracing Digital Ads

    As digital platforms allow marketers to reach out to target groups across various categories, many Small and Midsize Businesses – SMBs have opted for digital advertising owing to its democratized access. Digital enablers such as ePayments, eDiscovery, and eCommerce have enabled traders, service providers, Kirana owners, and small shopkeepers to have an online presence.

    As per Redseer, SMBs spent 30-35% of the total $ 8 Bn on digital ads in FY22 and are expected to increase their share to ~40% of the total digital ads expenditure by FY 28.

     

    Empowerment of Individual Creators

    The Indian digital economy has over 2.5-3.0 million sizeable content creators who have emerged into 4 archetypes: Micro, Macro, Mega, and Elite creators. The Micro/Macro influencers have given better ROI to bigger brands and enabled smaller D2C brands. It is projected that influencer-led live commerce in India will grow to $8 Bn by 2030, and marketing spending on influencers will grow to $ 3.5 Bn by 2028.

    As the creator economy grows, it is essential to bridge the gap between brands and influencers through a centralized platform such as the creator marketplace. Such marketplace can become a single point for the brands to discover and engage with creators. The user-generated content and influencer ecosystems have the capacity to drive highly targeted advertising. Since the UGC platforms already possess content creating communities, they are better positioned for setting up the creator marketplace.